UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 10-QSB
                                   (Mark One)


          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
              SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended June 30, 2004

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934


                For the transition period from ______ to ______

                         Commission File No. 0 - 20660


                              DIRECT INSITE CORP.
        (Exact name of Small Business Issuer as specified in its Charter)


          Delaware                                   11-2895590
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                    Identification  No.)


80 Orville Drive, Bohemia, N.Y.                       11716
(Address of principal executive offices)            (Zip Code)


       Registrant's telephone number, including area code (631) 244-1500

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

             Yes    [X]              No [  ]


The number of shares of $.0001 par value stock  outstanding  as of July 31, 2004
was: 4,355,684.

Transitional Small Business Disclosure Format (check one):  Yes [  ]   No [X]

<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                     INDEX

PART I - FINANCIAL INFORMATION                                              Page

  Item 1

  Condensed Consolidated Balance Sheets as of June 30, 2004 (Unaudited) and
   December 31, 2003                                                           3

  Condensed Consolidated Statements of Operations
   For the Three and Six Months Ended June 30, 2004 and 2003 (Unaudited)       4

  Condensed Consolidated Statements of Cash Flows
   For the Six Months Ended June 30, 2004 and 2003 (Unaudited)                 5

  Notes to Condensed Consolidated Financial Statements (Unaudited)             6

  Item 2

  Management's Discussion and Analysis or Plan of Operations                  14

  Item 3

  Controls and Procedures                                                     17

PART II - OTHER INFORMATION

  Item 1. Legal Proceedings                                                   18

  Item 2. Changes in Securities                                               18

  Item 3. Defaults Upon Senior Securities                                     18

  Item 4.  Submission of Matters to a Vote of Security Holders                18

  Item 5. Other Information                                                   18

  Item 6. Exhibits and Reports on Form 8-K                                    18

  Signatures                                                                  19


CERTIFICATIONS                                                                20
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF JUNE 30, 2004 AND DECEMBER 31, 2003
                       (in thousands, except share data)
<TABLE>
<CAPTION>
                                                                                      June 30,           December 31,
                                                                                       2004                 2003
                                                                              --------------------- --------------------
                                                                                   (Unaudited)            (Audited)
<S>                                                                           <C>                  <C>
ASSETS
Current assets
  Cash and cash equivalents                                                   $              189     $              75
  Accounts receivable, net of allowance for doubtful accounts of
   $2 in 2004 and 2003                                                                     1,301                 1,068
  Prepaid expenses and other current assets                                                  181                   215
  Assets from discontinued operations                                                          0                    47
                                                                              --------------------- --------------------
       Total current assets                                                                1,671                 1,405

Property and equipment, net                                                                  592                   771
Other assets                                                                                 320                   335
                                                                              --------------------- --------------------
         TOTAL ASSETS                                                         $            2,583    $            2,511
                                                                              ===================== ====================
LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current liabilities
  Accounts payable and accrued expenses                                       $            1,612    $            2,248
  Due to bank                                                                                601                   585
  Deferred revenue                                                                             0                    96
  Current portion of long-term debt                                                          811                   880
  Liabilities from discontinued operations, current portion                                  192                   581
                                                                              --------------------- --------------------
       Total current liabilities                                                           3,216                 4,390

Long term debt, net of current portion                                                        69                    42
Dividends payable                                                                            681                   382
Liabilities from discontinued operations, long-term                                            0                    87
                                                                              --------------------- --------------------
       Total liabilities                                                                   3,966                 4,901
                                                                              --------------------- --------------------

Commitments and contingencies

Shareholders' deficiency
  Preferred stock, $0.0001 par value; 2,000,000 shares authorized;
     Series A Convertible Preferred, 134,680 issued and outstanding
     in 2004 and 2003; liquidation preference of $2,750,000 in 2004 and
     2003                                                                                     -                     -
     Series B Redeemable Preferred, 974 issued and outstanding in 2004
     and 2003; liquidation preference of $974,075 in 2004 and 2003                            -                     -
     Series C Redeemable Preferred, 2,000 and 590 issued and outstanding
     in 2004 and 2003, respectively; liquidation preference of $2,000,000
     and $590,000, in 2004 and 2003, respectively
  Common stock, $0.0001 par value; 150,000,000
     shares authorized in 2004 and 2003;
     4,395,611 and 4,080,402 shares issued in 2004 and 2003,
     respectively; and 4,355,684 and 4,040,475 shares outstanding
     in 2004 and 2003, respectively                                                           -                     -
  Additional paid-in capital                                                            112,253               110,582
  Accumulated deficit                                                                  (113,308)             (112,644)
                                                                              --------------------- --------------------
                                                                                         (1,055)               (2,062)

  Common stock in treasury, at cost  - 24,371 shares                                       (328)                 (328)
                                                                              --------------------- --------------------
       Total shareholders' deficiency                                                    (1,383)               (2,390)
                                                                              --------------------- --------------------
       TOTAL LIABILITIES AND SHAREHODERS' DEFICIENCY                          $           2,583     $           2,511
                                                                              ===================== ====================
 </TABLE>
See notes to condensed consolidated financial statements.

                                       3
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                       (in thousands, except share data)
<TABLE>
<CAPTION>
                                                               Three Months Ended              Six Months Ended
                                                               ------------------              ----------------
                                                                    June 30,                       June 30,
                                                                    --------                       --------
                                                               2004            2003           2004           2003
                                                          --------------- -------------- --------------- --------------
   <S>                                                    <C>             <C>            <C>             <C>
   Revenue from continuing operations                     $       1,716   $       1,958   $      3,822   $       3,894
                                                          --------------- -------------- --------------- --------------
   Costs and expenses
     Operations, research and development                           846           1,155          1,764           2,201
     Sales and marketing                                            422             576            814           1,149
     General and administrative                                     755             847          1,404           1,709
     Amortization and depreciation                                  142             162            285             347
                                                          --------------- -------------- --------------- --------------
                                                                  2,165           2,740          4,267           5,406
                                                          --------------- -------------- --------------- --------------
   Operating loss                                                  (449)           (782)          (445)         (1,512)

   Other expenses
     Interest expense, net                                          (82)            (86)          (147)           (153)
     Other expense                                                  (33)            (40)           (33)            (40)
                                                          --------------- -------------- --------------- --------------
   Loss before provision for income taxes                          (564)           (908)          (625)         (1,705)

   Provision for income taxes                                        (3)             (2)            (4)             (2)
                                                          --------------- -------------- --------------- --------------
   Loss from continuing operations                                 (567)           (910)          (629)         (1,707)

   Income (loss) from discontinued operations                        59            (343)           263            (616)
                                                          --------------- -------------- --------------- --------------
   Net loss                                                        (508)         (1,253)          (366)          (2,323)

   Preferred stock dividends                                       (170)            (66)          (298)           (129)
                                                          --------------- -------------- --------------- --------------
   Net loss attributable to
     common shareholders                                  $        (678)  $      (1,319) $        (664)  $       (2,452)
                                                          =============   =============  =============   ==============
   Basic and diluted loss per share:
     Basic and diluted loss from continuing operations    $       (0.17)  $       (0.25) $       (0.22)  $        (0.46)

     Basic and diluted income (loss) from discontinued
     operations                                                    0.01           (0.08)          0.06           (0.16)
                                                          --------------- -------------- --------------- --------------
   Basic and diluted loss  per share                      $       (0.16)          (0.33)         (0.16)          (0.62)
                                                          =============== ============== =============== ==============
   Basic weighted average common shares
   outstanding                                                    4,288           3,976          4,186           3,953
                                                          =============== ============== =============== ==============
</TABLE>


See notes to condensed consolidated financial statements.

                                       4

<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                        (in thousands, except share data)
<TABLE>
<CAPTION>
                                                                                          For the six months ended
                                                                                                   June 30,
                                                                                             2004              2003
                                                                                         -----------------------------
<S>                                                                                      <C>              <C>
Cash flows from operating activities
 Loss from continuing operations                                                         $      (629)     $     (1,707)
 Adjustments to reconcile loss from continuing operations
  to net cash used in continuing operations:
   Amortization and depreciation:
     Property and equipment                                                                      284               346
     Other                                                                                         1                 1
    Provision for doubtful accounts                                                               --                 2
    Common stock and options issued for services                                                   4               130

  Changes in operating assets and liabilities:
    Accounts receivable                                                                         (233)             (192)
    Prepaid expenses and other current assets                                                     34                64
    Other assets                                                                                  14                34
    Accounts payable and accrued expenses                                                       (379)              189
    Restructuring costs payable                                                                   --               (16)
    Deferred revenue                                                                             (96)               --
                                                                                         -----------      ------------
       Net cash used in continuing operations                                                 (1,000)           (1,149)

  Income (loss) from discontinued operations                                                     263              (616)
  Change in:
    Assets and liabilities from discontinued operations                                         (429)              220
                                                                                         -----------      ------------
       Net cash used in discontinued operations                                                 (166)             (396)
                                                                                         -----------      ------------

       Net cash used in operating activities                                                  (1,166)           (1,545)
                                                                                         -----------      ------------
Cash flows used in investing activities
 Expenditures for property and equipment                                                         (31)             (162)
                                                                                         -----------      ------------
       Net cash used in investing activities                                                     (31)             (162)
                                                                                         -----------      ------------
Cash flows from financing activities
 Proceeds from common stock subscription receivable                                               --                22
 Proceeds from sales of preferred stock                                                        1,410               750
 Costs related to the sale of preferred stock                                                     --               (15)
 Advances from Bank, net                                                                          16                 1
 Proceeds from long-term debt, net of fees                                                        --               496
 Repayments of long-term debt - discontinued operations                                           --               (37)
 Repayments of long-term debt                                                                   (115)              (99)
                                                                                         -----------      ------------
       Net cash provided by financing activities                                               1,311             1,118
                                                                                         -----------      ------------
Net increase (decrease) in cash and cash equivalents                                             114              (589)

Cash and cash equivalents - beginning of period                                                   75               620
                                                                                         -----------      ------------
Cash and cash equivalents - end of period                                                $       189      $         31
                                                                                         ===========      ============

Non-cash investing and financing activities:

Issuance of 310,209 common shares in 2004
for services and fees incurred in 2003  (Note 6)                                        $       257
                                                                                         ===========
</TABLE>
See notes to condensed consolidated financial statements.

                                       5

<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003


1.   Interim Financial Information

     The  condensed  consolidated  balance  sheet as of June 30,  2004,  and the
     condensed  consolidated  statements  of  operations  and cash flows for the
     three and six months  ended June 30, 2004 and 2003,  have been  prepared by
     the Company and are not audited. These interim financial statements include
     all  adjustments   which   management   considers   necessary  for  a  fair
     presentation  of the financial  statements and consist of normal  recurring
     items.  The results of operations for the quarterly  periods ended June 30,
     2004,  are not  necessarily  indicative of results that may be expected for
     any other interim period or for the full year.

     These unaudited condensed  consolidated financial statements should be read
     in conjunction with the consolidated financial statements and notes thereto
     for the year ended December 31, 2003 included in the Company's  Form-10KSB.
     The  accounting  policies  used  in  preparing  these  unaudited  condensed
     consolidated  financial  statements are consistent  with those described in
     the December 31, 2003 consolidated financial statements.


2.   The Company

     Direct Insite Corp. and subsidiaries (the "Company"),  primarily operate as
     an  application  service  provider  ("ASP"),  that  markets  an  integrated
     transaction based "fee for service" offering called Invoices On-Line (IOL),
     an  electronic  invoice   presentment  and  payment  (EIP&P)  service  that
     processes  high  volumes  of  transactional  data for  invoice  presentment
     purposes delivered via the Internet on a global basis.

     The Commpany also provides additional service offerings in the form of its
     patented dbExpress TM technology, a management information tool that allows
     users to visually  data mine large  volumes of  transactional  data via the
     Internet.  A complete  Internet  Customer Care tool set integrated with the
     EIP&P product set is also available.  The Company  operates fully redundant
     data  centers  located at its main  office in Bohemia,  N.Y.  and in an IBM
     co-location facility in Newark, NJ.

     Management's liquidity plans are discussed in Note 9. Also, as described in
     Note 8, the Company has one major customer that accounted for approximately
     98% of the Company's  revenue for the six months ended June 30, 2004.  Loss
     of this customer would have a material adverse effect on the Company.

                                       6
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003


     Stock Options and Similar Equity Instruments
     --------------------------------------------

     As   permitted   under   SFAS  No.   148,   "Accounting   for   Stock-Based
     Compensation-Transition  and  Disclosure",  which  amended  SFAS  No.  123,
     "Accounting  for  Stock-Based  Compensation",  the  Company  has elected to
     continue  to  follow  the  intrinsic  value  method in  accounting  for its
     stock-based  employee  compensation  arrangements  as defined by Accounting
     Principles  Board Opinion  ("APB") No. 25,  "Accounting for Stock Issued to
     Employees",  and related interpretations  including FASB Interpretation No.
     44, "Accounting for Certain Transactions Involving Stock Compensation",  an
     interpretation of APB No. 25. The following table illustrates the effect on
     net loss and net loss per share if the  Company  had applied the fair value
     recognition provisions of SFAS No. 123 to stock-based employee compensation
     (in thousands, except per share data):
<TABLE>
<CAPTION>
                                                                  Three Months Ended          Six Months Ended
                                                                       June 30,                   June 30,
                                                              --------------------------- -------------------------
                                                                 2004          2003           2004         2003
                                                              ------------ -------------- ------------- -----------
     <S>                                                        <C>          <C>            <C>          <C>
     Net loss attributable to common shareholders
      As reported                                               $   (678)    $ (1,319)      $   (664)    $ (2,452)
      Less:  Stock-based employee compensation
       expense determined under fair value-based
       method for all awards                                        (400)        (270)          (445)        (591)
                                                                --------     --------       --------     --------
      Pro forma                                                 $ (1,078)    $  1,589)      $ (1,109)    $ (3,043)
                                                                ========     ========       ========     ========
     Basic and diluted net loss per share
      As reported                                               $  (0.16)    $  (0.33)        $(0.16)      $(0.62)
                                                                ========     ========       ========     ========
      Pro forma                                                 $  (0.25)    $  (0.40)        $(0.26)      $(0.77)
                                                                ========     ========       ========     ========
</TABLE>
     The fair value of Company  common stock  options  granted to employees  are
     estimated on the date of grant using the Black-Scholes option-pricing model
     with the following  assumptions:  (1) expected  volatility of 68.1% in 2004
     and ranging from 63.4% to 71.5% in 2003,  (2) risk-free  interest  rates of
     4.00% in 2004 and  4.25% in 2003 and (3)  expected  lives of 5.50  years in
     2004 and ranging from 2.00 years to 5.2 years in 2003.


3.   Discontinued Operations

     Platinum   Communications,   Inc.  In  2001,   the  Company  and   Platinum
     Communications, Inc. ("Platinum") completed a merger under an Agreement and
     Plan of Merger ("Merger  Agreement").  Under the Merger Agreement,  a newly
     formed  wholly  owned  subsidiary  of  the  Company  acquired  all  of  the
     outstanding common stock of Platinum.

     As a result of the lack of  development  of the  Platinum  business  and to
     focus the Company's  resources on its core business,  in December 2003, the
     Company  decided to close the  operations  of  Platinum.  Accordingly,  the
     results of  operations  and the  assets and  liabilities  of  Platinum  are
     presented as discontinued operations for both the current and prior period.
     The income and losses are  reflected  as income  (loss)  from  discontinued
     operations  in  the  accompanying  condensed  consolidated   statements  of
     operations.  The following  table reflects the results of the  discontinued
     operations of Platinum for the three and six months ended June 30, 2004 and
     2003, respectively (in thousands):

                                       7
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
<TABLE>
<CAPTION>
                                                        Three Months Ended               Six Months Ended
                                                            June 30                           June 30
                                                       2004             2003            2004              2003
                                                       ----             ----            ----              ----
          <S>                                          <C>             <C>             <C>              <C>
          Revenue                                      $      0        $   112         $     0          $   375
                                                       --------        -------         -------          -------

          Costs and Expenses
          ------------------
          Operations, research and
          development                                        --           (172)              --            (364)
          Sales and marketing                                --           (171)              --            (430)
          General and administrative                         --            (64)              --             (95)
           Amortization and depreciation                     --            (47)              --             (94)
           Other income (expense) - net                      61              1              268               1
           Interest expense, net                             (2)            (2)              (5)             (9)
                                                       --------        -------         --------          -------
                 Total other income and
                 (expenses)                                  59           (455)             263            (991)
                                                       --------        -------         --------          -------
                 Income (loss) from
                 discontinued operations               $     59        $  (343)        $    263          $  (616)
                                                       ========        =======         ========          =======
</TABLE>

     At June 30, 2004, the discontinued operation had no significant assets. The
     liabilities  of the  discontinued  operation  include  the balance of loans
     totaling $87,000, and accounts payable and accrued liabilities of $105,000.

4.   Accounts Receivable and Due To Bank

     The Company  has an Accounts  Receivable  Purchase  Agreement  with a Bank,
     whereby  the Company  from time to time may assign  some of their  accounts
     receivable to the Bank on a full  recourse  basis.  Upon  specific  invoice
     approval, an advance of 80% of the underlying receivable is provided to the
     Company.  The  remaining  balance  (20%),  less  an  administrative  fee of
     approximately  0.5% plus interest at the rate of 1-1/2% per month,  is paid
     to the  Company  once the  customer  has paid.  The  maximum  amount of all
     assigned receivables outstanding at any time shall not exceed $1.5 million.
     The initial term of the agreement was for one year, and continues until due
     notice  of  termination  is  given  at any  time  by  either  party  to the
     agreement.

     At June 30,  2004,  the  Company  had  assigned  approximately  $751,000 of
     accounts receivable to the Bank and received advances of $601,000.


5.   Long Term Debt Long-term debt consists of the following (in thousands):

       Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
                                                            June 30,          December 31,
                                                             2004                2003
                                                       ------------------- -----------------
       <S>                                                  <C>                <C>
       Lines of credit (a)                                 $    699           $     736
       Capitalized lease obligations (b)                        181                 186
                                                           --------           ---------
                                                                880                 922
       Less current portion                                    (811)               (880)
                                                           --------           ---------
       Long-term debt, net of current portion             $      69           $      42
                                                          =========           =========
</TABLE>



                                       8
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003


     (a)  In 2003, the Company  obtained a discretionary  Line of Credit ("LoC")
          in the amount of $500,000 from JP Morgan  Private Bank  ("JPMC").  The
          LoC is  guaranteed  by Tall Oaks Group,  LLC and is  repayable  on the
          earlier of demand or June 30,  2005.  The LoC  permitted  two forms of
          draw down; one based upon prime rate, the second based upon LIBOR.  In
          2003, the Company elected to draw down $500,000 applying the terms and
          conditions set forth for LIBOR.  The interest rate is the JPMC reserve
          adjusted  LIBOR  plus  2.30%.   As  of  June  30,  2004,  the  balance
          outstanding is $500,000 and the applied interest rate was 3.51%.

          Also in 2003, the Company obtained, and fully drew upon, a second line
          of credit from Sterling  National Bank  ("Sterling")  in the amount of
          $250,000. The line is guaranteed by the Company's chairman, secured by
          the  assets  of the  Company,  and  carries  an  interest  rate of 7%.
          Repayments  are  calculated  monthly  at  2.778%  of  the  outstanding
          balance,  plus finance  charges,  and continue until the line is fully
          paid.  At June 30,  2004,  the Company had an  outstanding  balance of
          approximately $199,000 under the line of credit.

     The Company has  equipment  under  capital  lease  obligations  expiring at
     various times through 2007. The assets and liabilities under capital leases
     are  recorded  at the  lower of the  present  values of the  minimum  lease
     payments or the fair values of the assets.

6.   Shareholders' Deficiency

     Preferred Stock
     ---------------

     In December 2003, the Company's  Board of Directors  authorized the sale of
     up to 1,500 shares of its non-voting  Series C Redeemable  Preferred  Stock
     ("Preferred  Stock - C") and in April 2004 the Board authorized the sale of
     an additional 500 shares. During December 2003, the Company sold 590 shares
     of the  Preferred  Stock - C in  consideration  for $590,000  less fees and
     expenses   of  $60,000  to   Metropolitan   Venture   Partners   II,   L.P.
     ("Metropolitan")  and certain board members and an executive officer of the
     Company. Metropolitan was issued 200,000 warrants with an exercise price of
     $2.125 to purchase  common stock of the Company for services in  connection
     with the  transaction.  The holders of Preferred  Stock - C are entitled to
     dividends  at the rate of 9-1/2% per annum,  payable  quarterly  in arrears
     beginning  October 1, 2005.  The  Company  has the option to redeem  issued
     shares of Preferred  Stock - C, in whole or in part, at any time,  with the
     redemption  price  equal to the  purchase  price  plus  accrued  and unpaid
     dividends.  For each share of Preferred Stock - C purchased,  each investor
     received a Warrant to purchase the number of shares of the Company's common
     stock equal to the Price Per Share divided by 123% of the closing price per
     share of the Company's common stock on the trading day immediately prior to
     the date of issuance of the  Warrant.  During the six months ended June 30,
     2004  the  Company  sold  an  additional   1,410  shares  for  proceeds  of
     $1,410,000,  and issued 1,159,629 warrants in connection with the issuance.
     As of June 30, 2004, approximately $63,000 in dividends are accrued for the
     Preferred Stock - C holders.  As of June 30, 2004,  1,990,779  warrants are
     outstanding  in connection  with the issuances of Preferred  Stock - C. The
     warrants  expire in 2008 and 2009 and have  exercise  prices  ranging  from
     $0.93 to $2.13 per common share. The proceeds were used for working capital
     purposes.

     Between  September  2002 and June 2003, the Company sold a total of 134,680
     shares of Series A Convertible  Preferred Stock, ("Series A Preferred ") in
     consideration  for the gross amount of $2,750,000 to  Metropolitan  Venture
     Partners II, L.P. The holders of the Series A Preferred ("the Holders") are
     entitled to  dividends,  on a cumulative  basis,  at the rate of 9-1/2% per
     annum,  compounded  quarterly and payable on February 1, 2005 and September
     25, 2005. The payment of the first  dividend was  originally  scheduled for
     September 25, 2004,  however,  the Company and the Holders  agreed to defer
     this payment until February 1, 2005. As  consideration  for the deferral of

                                       9
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003

     the dividend  payment,  the Company  agreed to pay the Holders a premium of
     7.5% of the  dividend.  In May 2004 the  Company  and the  Holders  further
     agreed to grant the Company the right, in its sole discretion, to defer the
     payment of the  dividend  scheduled  to be paid on  February  1, 2005 until
     February 1, 2006.  In the event the Company  elects to pay the  dividend on
     February 1, 2006 the Holders  would  receive a premium of $157,000.  In the
     event the Company  does not elect to defer the payment of the  dividend the
     Company  agreed to pay the Holders a premium of $35,000.  Also, the Company
     and the Holders  further agreed to grant the Company the right, in its sole
     discretion,  to defer the payment of the  dividend  scheduled to be paid on
     September 25, 2005 until  February 1, 2006. In the event the Company elects
     to pay this  dividend  on  February  1, 2006 the  Holders  would  receive a
     premium of $17,000.  In the event the  Company  does not elect to defer the
     payment of the dividend the Company  agreed to pay the Holders a premium of
     $8,000.

     Common Stock and Option Issuances
     ---------------------------------

     During the six months  ended June 30,  2004,  the  Company  issued  315,209
     unregistered  shares of common stock and options to purchase  50,000 shares
     of its common stock as follows:

     --   15,000  shares  of  common  stock  valued at  $12,000  pursuant  to an
          employment  agreement with the Company's  Chief  Executive  Officer as
          follows:  5,000  shares  valued at $4,000 for services for the quarter
          ended March 31, 2004,  and 10,000 shares valued at $8,000 for services
          rendered and costs recorded in the year 2003.

     --   82,509  shares valued at $75,000 to directors for service on the Board
          of Directors and  Committees of the Board for the year 2003, the costs
          were recorded in 2003;

     --   35,000  shares  valued at $26,000 to an employee for services in 2003,
          the costs were recorded in 2003;

     --   182,700 shares valued at $148,000 to consultants for services rendered
          in 2003, the costs were recorded in 2003.

     --   50,000  options to purchase  shares of common stock to a new member of
          the Board of  Directors.  The options vest ratably from  February 2004
          through February 2007 and have an exercise price of $0.77 per share.

Earnings Per Share
------------------

The  Company  displays  earnings  per share in  accordance  with  SFAS No.  128,
"Earnings  Per Share".  SFAS No. 128  requires  dual  presentation  of basic and
diluted  earnings  per share  ("EPS").  Basic EPS  includes no  dilution  and is
computed by dividing net income (loss)  attributable  to common  shareholders by
the weighted average number of common shares outstanding for the period. Diluted
EPS includes the  potential  dilution  that could occur if  securities  or other
contracts to issue common stock were  exercised or converted  into common stock.
Outstanding stock options, warrants and other potential stock issuances have not
been  considered in the  computation  of diluted EPS amounts since the effect of
their inclusion would be antidilutive.

Securities that could potentially dilute basic EPS in the future,  that were not
included in the  computation of the diluted EPS because to do so would have been
antidilutive for the periods presented, consist of the following (in thousands):

                                       10
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003


<TABLE>
        <S>                                                                <C>
        Options to purchase common stock                                   4,381
        Convertible preferred stock and warrants to acquire common stock   3,338
                                                                           -----
                Total potential common shares as of June 30, 2004          7,719
                                                                           =====
</TABLE>

7.   Reclassifications

     Certain  reclassifications  have  been made to the  condensed  consolidated
     financial statements shown for the prior period in order to have it conform
     to the current period's  classifications.  These  reclassifications have no
     effect on previously reported net income or loss.


8.   Products and Services

     The Company and its subsidiaries  currently operate in one business segment
     and provide two separate  products:  ASP  services  and custom  engineering
     services.
<TABLE>
<CAPTION>
                                                         Three Months Ended                  Six Months Ended
                                                              June 30,                           June 30,
                                                         2004            2003            2004              2003
                                                 ------------------- --------------- -------------- -----------------
               <S>                                      <C>                  <C>             <C>            <C>
               ASP fees                                  $1,090              $1,546          $2,222         $2,672
               Custom engineering fees                      626                 412           1,600          1,222
                                                         ------              ------          ------         ------
                    Total Revenue                        $1,716              $1,958          $3,822         $3,894
                                                         ======              ======          ======         ======
</TABLE>
     Major Customer
     --------------

     For the three and six months ended June 30, 2004, the Company had one major
     customer that accounted for 96.2% and 97.5% of the Company's total revenue,
     respectively.  For the three and six month  periods in 2003,  this customer
     accounted  for  87.1% and 87.2% of total  revenue,  respectively.  Accounts
     receivable from this customer amounted to $1,255,000 at June 30, 2004.


9.   Management's Liquidity Plans

     In order to meet the Company's cash needs and to achieve positive operating
     cash flows the Company has and will  continue to take  various  actions and
     steps that it believes will enable the Company to attain these goals. These
     actions include:

     --   In the second  half of 2003 the Company  embarked on a cost  reduction
          program,  including  among other things,  staff  reductions,  pay rate
          reductions, and elimination of non-essential expenses. As demonstrated
          by the  improved  operating  performance  in the first half 2004,  the
          Company  believes these cost  reductions have begun to have a positive

                                       11
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003


          impact  on its  operating  performance.  The  Company  notes  that its
          intention is to reinstate the pay rate reductions as soon as practical
          and as soon as its operating results and cash flows permit.

     --   As  discussed  in Note 3, in  December  2003 the  Company  closed  the
          Dallas,  Texas based operations of Platinum.  Platinum had experienced
          losses and had  significant  cash needs.  In 2003,  Platinum  utilized
          $1,012,000  of cash.  During the six months ended June 30,  2004,  the
          discontinued operations of Platinum used $166,000 of cash.

     --   The Company intends to raise additional capital through private equity
          offerings and borrowing. In this regard in December 2003, as discussed
          in Note 6, the Company  initiated the sale of Series C Preferred stock
          and as of  June  30,  2004  had  net  proceeds  from  these  sales  of
          $1,940,000.

     --   The Company  continues to strive to increase  revenue through offering
          custom  engineering  services,  expanding  and  enhancing its existing
          product offerings,  and introducing new product offerings. In 2003 the
          Company's  revenue from continuing  operations  increased  $827,000 or
          12.5%  over  revenue  in 2002.  For the first  six  months of 2004 our
          revenue  from  continuing  operations  was only  slightly  lower  than
          revenue  for the same  period in 2003 and  revenue for the year ending
          December 31, 2004 is expected to exceed 2003 revenue.

     --   The  Company  continues  to expand its  marketing  efforts in order to
          increase  its customer  base.  In this  regard,  in 2003,  the Company
          became a business partner with IBM and through this  relationship will
          work with IBM in an  effort to  achieve  sales to new  customers.  The
          Company will continue to pursue similar channel partner opportunities.
          In addition, in June 2004 the Company signed a contract to provide ASP
          services with a new customer  that is expected to produce  significant
          revenue in 2004 and beyond.

     The Company  believes that the plan and  initiatives  discussed  above will
     ultimately lead to positive cash flows and profitability. While the Company
     pursues  these goals the Company  also  believes  that the ability to raise
     additional   capital  through  equity  and  debt  placements  will  provide
     sufficient  cash to meet our  requirements  at least through June 30, 2005.
     There can be no assurance,  however, that the Company will achieve its cash
     flow and  profitability  goals,  or that the Company  will be able to raise
     additional  capital  sufficient to meet operating expenses or implement the
     plan.  In such  event,  the  Company  may  have to  revise  the  plans  and
     significantly reduce operating expenses, which could have an adverse effect
     on revenue and operations in the short term.


10.  New Accounting Pronouncements

     In January  2003 and amended in December  2003,  the  Financial  Accounting
     Standards Board ("FASB") issued  Interpretation  No. 46,  "Consolidation of
     Variable  Interest  Entities" ("FIN 46"), an  interpretation  of Accounting
     Research  Bulletin  No. 51. FIN 46 expands  upon and  strengthens  existing
     accounting  guidance that  addresses  when a company  should include in its
     financial  statements  the assets,  liabilities  and  activities of another
     entity. A variable interest entity is any legal structure used for business
     purposes that either does not have equity  investors  with voting rights or
     has equity investors that do not provide sufficient financial resources for
     the entity to support its activities.  FIN 46 requires a variable  interest
     entity to be  consolidated  by a company  if that  company  is subject to a
     majority of the risk of loss from the variable interest entity's activities
     or entitled to receive a majority of the entity's residual returns or both.
     The  consolidation  requirements  of FIN 46 apply  immediately  to variable
     interest  entities  created  after  January  31,  2003.  The  consolidation
     requirements  apply to older  entities in the first  fiscal year or interim
     period  beginning  after June 15, 2003.  However,  in December  2003,  FASB
     deferred  the  latest  date by which all  public  entities,  which meet the
     definition of small business  issuer under SEC  Regulation  S-B, must apply
     FIN 46 to the first interim or annual reporting period ended after December
     15, 2004. The effect of the adoption of this new  accounting  pronouncement
     is not expected to have a significant impact on the Company's  consolidated
     financial statements.

                                       12
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

Item 2 - Managements Discussion and Analysis or Plan of Operations

Forward looking statements

All statements  other than  statements of historical  fact included in this Form
10-QSB including, without limitation, statements under, "Management's Discussion
and Analysis of Financial  Condition  and Results of  Operations"  regarding the
Company's financial position,  business strategy and the plans and objectives of
management for future operations, are forward-looking  statements.  When used in
this Form 10-QSB, words such as "anticipate,"  "believe,"  "estimate," "expect,"
"intend"  and  similar  expressions,  as  they  relate  to  the  Company  or its
management, identify forward-looking statements. Such forward-looking statements
are based on the  beliefs of  management,  as well as  assumptions  made by, and
information  currently  available to, the Company's  management.  Actual results
could  differ  materially  from  those   contemplated  by  the   forward-looking
statements  as a  result  of  certain  factors  including  but not  limited  to,
fluctuations in future operating results, technological changes or difficulties,
management  of future  growth,  the risk of errors or failures in the  Company's
software products,  dependence on proprietary  technology,  competitive factors,
risks associated with potential  acquisitions,  the ability to recruit personnel
and the dependence on key personnel.  Such statements  reflect the current views
of  management  with respect to future events and are subject to these and other
risks,  uncertainties  and assumptions  relating to the  operations,  results of
operations, growth strategy and liquidity of the Company. All subsequent written
and oral  forward-  looking  statements  attributable  to the Company or persons
acting  on its  behalf  are  expressly  qualified  in  their  entirety  by  this
paragraph.

Overview

Direct Insite Corp. and its  subsidiaries  (hereinafter  referred to at times as
"Direct Insite" or the "Company"), was organized under the name Unique Ventures,
Inc. as a public company, under the laws of the State of Delaware, on August 27,
1987.  In August,  2000,  we changed our name to Direct  Insite Corp.  which the
Board of Directors believed was more in line with our new direction.

Direct Insite,  primarily  operates as an application  service provider ("ASP"),
that markets an integrated  transaction  based "fee for service" offering called
Invoices  On-Line (IOL), an electronic  invoice  presentment and payment (EIP&P)
service  that  processes  high  volumes  of   transactional   data  for  invoice
presentment  purposes  delivered via the Internet on a global basis on behalf of
our.  IOL is the  Company's  primary  offering  and it is a  globally  delivered
service that provides electronic invoice  presentation in more than 20 different
countries around the globe and in more than 10 languages and currencies.  Direct
Insite  currently hosts several million  invoices that are accessible  "on-line"
via the Internet 24 hours per day,  seven days per week,  365 days per year. IOL
is a uniquely  positioned  service  offering  in the  industry,  the  service is
designed  to handle  the  complex  invoicing  found in today's  global  business
environment.  The  solution  allows  Global 1000  companies  to receive,  route,
approve  and pay  invoices  on-line  in the  local  language  and  currency.  By
automating the traditional  paper-based  invoicing  process,  customers now have
easy and quick access to line-item billing information, reporting and analytics.
With the  enhanced  level of accuracy  provided  by IOL,  invoice  disputes  are
greatly reduced and overall customer satisfaction is substantially increased.

Direct  Insite also  provides  additional  service  offerings in the form of its
patented  dbExpress TM  technology,  a management  information  tool that allows
users  to  visually  data  mine  large  volumes  of  transactional  data via the
Internet.  A complete  Internet Customer Care tool set integrated with the EIP&P
product set is also  available.  We operate fully redundant data centers located
at our main  office in  Bohemia,  N.Y.  and in Newark,  NJ. Our  facility in New
Jersey is space leased at an International Business Machines ("IBM"), e-business
Hosting  Center.  This  co-location  /  redundancy  feature  enables us to offer
virtually down time free service.

This suite of services enables us to provide a comprehensive  Internet delivered
service   including  the  processing  and   consolidation   of  invoice  related
transaction  records and  supporting  information  through  all of the  internal
workflow management processes including an electronically delivered invoice with
customer analytics including the ability to dispute any line item of any invoice

                                       13
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES

and  pay  the  invoice  through  multiple   electronic  payment  options.   This
comprehensive  service  offering  provides back office  operations,  reduces our
customers'  costs and provides for improved  customer  service by providing  our
customer's  customer with easy access to all of the detailed  information  about
their invoice.

Currently, IBM, our largest customer,  representing approximately 96% and 98% of
our  revenue  for  the  three  and  six  month  periods  ended  June  30,  2004,
respectively,  utilizes  our suite of IOL  products  and services to allow their
customers from around the globe to receive,  analyze,  dispute and cost allocate
all of their invoice  related  information  in their local language and currency
via the Internet 24 hours a day, 7 days a week, 365 days a year.

As  disclosed in Note 6 to the  accompanying  Condensed  Consolidated  Financial
Statements, during the six months ended June 30, 2004, we received proceeds from
the sale of Redeemable Preferred Series C Stock totaling $1,410,000.

Results of operations

For the three and six month  periods  ended June 30, 2004 we had net losses from
continuing  operations of $567,000 and $629,000,  respectively,  compared to net
losses from continuing operations of $910,000 and $1,707,000 in the same periods
in 2003. This significant improvement of a 63% reduction in the loss for the six
month  period  ended June 30, 2004 is the result of our  significant  efforts to
streamline our operations and reduce our operating costs as discussed below. Net
losses for the three and six month periods ended June 30, 2004 were $508,000 and
$366,000, respectively,  compared to net losses of $1,253,000 and $2,323,000 for
the same periods in 2003. This includes income from  discontinued  operations of
$59,000 and  $263,000 in the three and six month  periods  ended June 30,  2004,
respectively.  This  income is  principally  the  result of  recognizing  income
related to deferred revenue of $180,000 and a gain of  approximately  $83,000 on
the settlement of the office lease included in other income of the  discontinued
operation. The results for the first six months of 2004 may not be indicative of
results for subsequent quarters or for the year.

For the three  months ended June 30, 2004  revenue  from  continuing  operations
decreased by $242,000 or 12.3% to  $1,716,000  compared to revenue of $1,958,000
for the same  period in 2003.  This  decrease  is  primarily  attributable  to a
decrease  in ASP  services  compared  to the same  period in 2003,  offset by an
increase in custom  engineering  fees. In the second  quarter of 2003 we had ASP
service fees from a customer that did not continue after June 2003. The increase
in engineering fees is principally due to the further  international  deployment
of our ASP  services  and is expected to result in future  increases  in revenue
from ongoing ASP  services.  For the six months ended June 30, 2004 revenue from
continuing  operations was $3,822,000,  a decrease of $72,000 (1.8%) compared to
revenue of $3,894,000  for the same period in 2003. We expect revenue to improve
in the  second  half of 2004 with the  addition  of new  customers  and  further
increases in  engineering  fees from IBM as we expand the  deployment of our ASP
services.

In 2003, the Company embarked on a major cost reduction program, including among
other  things,  staff  reductions,   pay  rate  reductions  and  elimination  of
non-essential  expenses.  These  efforts are  reflected  in the cost  reductions
discussed  below.  Certain  of  these  reductions,  particularly  the  pay  rate
reductions,  are temporary in nature, as it is the Company's intent to reinstate
the pay rate reductions at such time as the Company's operating results and cash
flow permit.

Costs of operations,  research and development decreased by $309,000 (26.7%) and
$437,000  (19.9%)  for the three  and six month  periods  ended  June 30,  2004,
respectively,  compared  to the  same  periods  in  2003.  These  costs  consist
principally   of  salaries  and  related   expenses  for  software   developers,
programmers,  custom  engineers,  network  services,  and  quality  control  and
assurance.  Also included are network costs, costs of the production co-location
facility and other expenses  directly related to our custom  engineering and ASP
production  services.  The decrease in costs is principally  due to decreases in
personnel  wages and  benefit  costs,  a decrease in costs for  software,  and a
decrease in  professional  fees,  offset by an increase in rental  costs for our
co-location   production   facility.   All  other  operating  expenses  remained
relatively flat.

                                       14
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES

Sales and marketing costs decreased  $154,000  (26.7%) and $335,000  (29.2%) for
the three and six month periods ended June 30, 2004,  respectively,  compared to
the same periods in 2003.  Salaries and related costs  decreased by $170,000 for
the six months ended June 30, 2004, primarily due to a decrease in personnel and
salary  reductions.  Also,  consulting fees were reduced by $146,000,  while all
other costs were reduced by $19,000, net.

General and administrative  costs decreased $92,000 (10.9%) and $305,000 (17.8%)
for the three and six month periods ended June 30, 2004, respectively,  compared
to the same periods in 2003.  Salaries and related costs decreased  $270,000 for
the six months ended June 30, 2004,  principally due a decrease in personnel and
salary reductions, while other costs decreased in a net amount of $35,000.

Depreciation and amortization  expense decreased by $20,000 (12.3%) and $$62,000
(17.9%) for the three and six month periods  ended June 30, 2004,  respectively,
primarily due to fully  amortizing  certain  software  costs and other  computer
equipment and a lower rate of investment in new software and equipment.



Financial Condition and Liquidity

For the six months ended June 30, 2004,  we had a net loss of $366,000  compared
to a net loss of $2,323,000  for the same period in 2003. We used  $1,000,000 in
cash for  continuing  operations  in the first six  months of 2004  compared  to
$1,149,000  for the same period in 2003,  an  improvement  of $149,000 or 13.0%.
Cash used in discontinued  operations was $166,000 for the six months ended June
30, 2004.

We funded the shortfall in cash from  operations  primarily  through the sale of
redeemable preferred stock totaling $1,410,000.

Cash used in operations,  including cash used for discontinued  operations,  for
the six months ended June 30, 2004 was $1,166,000, consisting of the net loss of
$366,000,  offset by non-cash expenses of $289,000,  including  depreciation and
amortization  of  $284,000.  This is further  reduced by an increase in accounts
receivable and other current assets of $185,000,  a decrease in accounts payable
and accrued  expenses of $379,000 and a decrease in deferred revenue of $96,000.
Additionally,  cash used in operations was reduced by the decrease in net assets
attributable to discontinued operations of $429,000.

Cash used in investing  activities was $31,000 for the six months ended June 30,
2004,  compared  to  $162,000  for same  period  in 2003.  This was  principally
expenditures for property and equipment.

Cash from financing  activities totaled $1,311,000 for the six months ended June
30, 2004,  compared to  $1,118,000  for the six months  ended June 30, 2003.  As
noted above,  we received net proceeds from the sale of Series C Preferred stock
of  $1,410,000.  We also repaid  $115,000 of  long-term  debt and capital  lease
obligations  in the first  half of 2004.  Advances  from a bank for  receivables
financing increased by $16,000 in 2004.

Management's Liquidity and Financing Plans

In order to meet our cash needs and to achieve positive  operating cash flows we
have and will  continue to take  various  actions and steps that we believe will
enable us to attain these goals.

--   In the second half of 2003 we embarked on a major cost  reduction  program,
     including among other things,  staff reductions,  pay rate reductions,  and
     elimination of non-essential expenses. We believe that this will reduce our
     operating  costs in excess of $1.6 million on an annual  basis.  We believe

                                       15
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES

     these cost reductions have begun to have a positive impact on our operating
     performance.  We note  that it is our  intent  to  reinstate  the pay  rate
     reductions as soon as practical  and our  operating  results and cash flows
     permit

--   In  December  2003 we closed the  operations  of our  Platinum  subsidiary.
     Platinum had experienced losses and had significant cash needs. We estimate
     that this action will reduce our  operating  costs in excess of  $1,200,000
     annually.  During the six  months  ended June 30,  2004,  the  discontinued
     operations of Platinum used $166,000 of cash.

--   We intend to raise additional  capital through private equity offerings and
     borrowing.  In this  regard  in  December  2003,  as  discussed  above,  we
     initiated the sale of Series C Preferred  stock and as of June 30, 2004 had
     net proceeds  from these sales of  $1,940,000.  There can be no  assurance,
     however,  that we will be able to raise  additional  capital through equity
     sales and/or borrowing.

--   We continue  to strive to increase  our  revenue  through  offering  custom
     engineering   services,   expanding  and  enhancing  our  existing  product
     offerings such as IOL, and introducing new product  offerings.  In 2003 our
     revenues  from  continuing  operations  increased  $827,000  or 12.5%  over
     revenues  in 2002.  . For the first six  months  of 2004 our  revenue  from
     continuing  operations  was only  slightly  lower than revenue for the same
     period in 2003 and  revenue  for the total year 2004 is  expected to exceed
     2003 revenue.

--   We  continue  to expand  our  marketing  efforts in order to  increase  our
     customer base. In this regard,  in 2003, we became a business  partner with
     IBM and through this  relationship  will work with IBM to achieve  sales to
     new  customers.   We  will  continue  to  pursue  similar  channel  partner
     opportunities.  In addition, in June 2004 the Company signed a new contract
     for  ASP  services  with  a  new  customer  that  is  expected  to  produce
     significant revenue in 2004 and beyond.

We believe that our plans and new  initiatives  as discussed  above will lead to
positive  cash  flows and  profitability.  While we pursue  these  goals we also
believe that our ability to raise  additional  capital  through  equity and debt
placements  will  provide  sufficient  cash to meet  our  requirements  at least
through June 30, 2005. There can be no assurance,  however, that we will achieve
our  cash  flow  and  profitability  goals,  or that  we  will be able to  raise
additional  capital  sufficient to meet our operating  expenses or implement our
plan. In such event,  we may have to revise our plans and  significantly  reduce
our  operating  expenses,  which  could  have an adverse  effect on revenue  and
operations in the short term.



Item 3 - Controls and Procedures

Our chief  executive  officer and chief  financial  officer have  supervised and
participated in an evaluation of the  effectiveness  of our disclosure  controls
and  procedures  as of a date  within 90 days of the date of this  report,  and,
based on their  evaluations,  they  believe  that our  disclosure  controls  and
procedures (as defined in Rule 13a-14(c) of the Securities Exchange Act of 1934,
as amended) are designed to ensure that information  required to be disclosed by
us in the reports  that we file or submit under the  Securities  Exchange Act of
1934 is recorded,  processed,  summarized and reported,  within the time periods
specified in the  Commission's  rules and forms.  As a result of the evaluation,
there were no significant  changes in our internal  controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation.

                                       16
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings
        None

Item 2. Changes in Securities
        None

Item 3. Defaults Upon Senior Securities
        None

Item 4. Submission of Matters to a Vote of Security Holders
        None

Item 5. Other Information
        None

Item 6. Exhibits and Reports on Form 8-K.
   (a)  Exhibits

          31   Certifications pursuant to Rules 13a-14(a) as adopted pursuant to
               Section 302 of the Sarbanes-Oxley Act of 2002.
          32   Certifications  pursuant  to 18 U.S.C.  Section  1350 as  adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

   (b)  Reports on Form 8-K

        None

                                       17
<PAGE>
                     DIRECT INSITE CORP. AND SUBSIDIARIES

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.




DIRECT INSITE CORP.



/s/ James A. Cannavino
-------------------------------------------
James A. Cannavino, Chief Executive Officer                   August 20, 2004


/s/ Michael J. Beecher
-----------------------------------------------
Michael J. Beecher, Chief Financial Officer                   August 20, 2004